Fusang Exchange, a licensed Malaysian digital securities platform, is to issue its first blockchain bond in association with the Malaysian subsidiary of the China Construction Bank (CCB), the world’s second-largest bank. While the announcement claims a $3 billion target size, the initial blockchain token issuance seems to be $14 million.
The bond is a securitization of a special purpose vehicle LongBond Ltd set up to issue the bonds. The proceeds will be deposited at CCB Labuan in a trust account, and Fusang claims the loan notes are “fully secured obligations ultimately backed by the balance sheet of the world’s second largest bank”. However, the token liability belongs to LongBond and the trust account deposits will be a liability of the Libuan branch and subsidiary of CCB. Costs will come out of the trust deposit account and there is no estimate of those costs.
CCB Labuan also acts as lead arranger and listing sponsor but does not stand behind the prospectus.
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